20% Down on 4 unit (Quad)?

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20% Down on 4 unit (Quad)?

David White
Rental Property Investor · Atlanta, GA · Member since 2019 · 67 posts · 20 votes

Hi all,

I am looking to purchase a 4 plex and was looking into down payment options. Is there anyway (apart from owner financing) to put 20% down as opposed to 25%, and not have to live in the property like with a FHA loan?

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Michael King
Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
6y
Originally posted by @David White:

@Michael King This is encouraging to hear. Was this a 30 year fixed term?

Yes it was a 30 year term. I didn't have the full 20% down; I only had 10% so they gave me a $100K line of credit on one of my rentals which is owned free and clear; I used $40K of that, put my $40 in and they funded the other $240k. If you have 20% you should have no problem getting the loan. I think your bank is telling you to try another bank. 

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  • Michael King
    Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    6y

    I put 20% down with a small, regional bank here in MO. This is for a 4 plex. I didn't have to live in it. 

    3Reply
  • David White
    OP
    Rental Property Investor · Atlanta, GA · Member since 2019 · 67 posts · 20 votes
    6y

    @Michael King This is encouraging to hear. Was this a 30 year fixed term?

    0Reply
  • Michael King
    Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    6y
    Originally posted by @David White:

    @Michael King This is encouraging to hear. Was this a 30 year fixed term?

    Yes it was a 30 year term. I didn't have the full 20% down; I only had 10% so they gave me a $100K line of credit on one of my rentals which is owned free and clear; I used $40K of that, put my $40 in and they funded the other $240k. If you have 20% you should have no problem getting the loan. I think your bank is telling you to try another bank. 

    3Reply
  • Lee RipmaPro Member
    Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes
    6y

    @David White

    If you’re taking conforming loans with the lowest rate (4%) and 30 years fixed on investment properties it’s 25% down. However you can get a local Commerical bank to do 20% down if PP is under 1M. For those you will likely have 20 year am and 5 year ballon but ask around to local banks and see what you can find.

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    2Reply
  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    6y

    @David White

    I agree with the others.  I use small local banks to finance my deals.  Usually 5 year loans and amortized over 20 or 25 years.  If you can get your cash flow numbers to work at a 20 year amortization you’ll see the principle drop much quicker than on a 30 year loan.

    2Reply
  • David White
    OP
    Rental Property Investor · Atlanta, GA · Member since 2019 · 67 posts · 20 votes
    6y

    @Michael King Thank you! I haven’t gone the local bank route yet. Will definitely give this a try.

    1Reply
  • David White
    OP
    Rental Property Investor · Atlanta, GA · Member since 2019 · 67 posts · 20 votes
    6y

    @Lee Ripma Thank you for the insight. Very helpful!

    0Reply
  • David White
    OP
    Rental Property Investor · Atlanta, GA · Member since 2019 · 67 posts · 20 votes
    6y

    @Kenneth Garrett This is great to know. I’ll go back through and look at the numbers. Thank you!

    0Reply
  • Eric GoldmanBusiness Member
    Lender · PA · Member since 2019 · 357 posts · 190 votes
    6y

    ive been seeing 5/7 year arms 20-25 year ams from small banks.  New programs are coming out from different sources bi weekly to monthly. 

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    2Reply
  • Ercle Terrell
    Member since 2019 · 4 posts · 4 votes
    6y

    @David White are you interested in using hard money to purchase? If so, you may be able to purchase with a little to no money down. I work for Flynn Family Lending and we can help you purchase this property or give you the down payment to do so. Let me know if you want to discuss further.

    0Reply
  • Dustin Dumbravo
    New to Real Estate · Member since 2020 · 14 posts · 5 votes
    6y

    I've been calling national and local banks for the past few days for my first quadplex deal. Some national banks won't even touch multi family investment property right now. All are a minimum of 25-35% down right now on a 30 year fixed loan. Can't find anything cheaper than a 4.125% interest rate. Will not be doing VA/FHA as I will not be living in the property. Times are tighter right now on the multi family units with banks..

    3Reply
  • Naomasa Hase
    Rental Property Investor · St. Louis, MO · Member since 2020 · 20 posts · 4 votes
    6y

    @Michael King Wow that's great! What bank did you go through?

    0Reply
  • Michael King
    Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    6y
    Originally posted by @Naomasa Hase:

    @Michael King Wow that's great! What bank did you go through?

     I used Dalton Hewitt and Terrence Rogers at Carrollton Bank in St. Louis Hills office. I can't post the phone number. A very helpful pair of guys. Let them know I sent you (I don't get any benefit, but they know that I'm very happy with their service as I'm referring people to them). 

    0Reply
  • Marc Alberto
    Rental Property Investor · Danbury, CT · Member since 2016 · 25 posts · 24 votes
    6y

    @David White I was able to refinance at the end of April using a small local bank with 20% down and a 30-year term through an LLC. They were able to get an exception for the lower down payment.

    1Reply
  • Rita Goforth
    Real Estate Agent · Charlotte, NC · Member since 2020 · 7 posts · 7 votes
    6y

    @David White yes you can. I’m a Realtor based in Charlotte NC. I’ve sold these in the past.

    1Reply
  • David White
    OP
    Rental Property Investor · Atlanta, GA · Member since 2019 · 67 posts · 20 votes
    6y

    @Marc Alberto With the LLC, what did they look at to qualify it for the loan? Or did they still look at your personal finances? MY LLC is recently formed and I have not transacted any business in it yet.

    0Reply
  • David White
    OP
    Rental Property Investor · Atlanta, GA · Member since 2019 · 67 posts · 20 votes
    6y

    @Rita Goforth That’s awesome!

    0Reply
  • Nick G.
    Lender · NY / FL · Member since 2013 · 240 posts · 44 votes
    6y

    @Marc Alberto what bank was this?

    0Reply
  • Marc Alberto
    Rental Property Investor · Danbury, CT · Member since 2016 · 25 posts · 24 votes
    6y
    Originally posted by @David White:

    @Marc Alberto With the LLC, what did they look at to qualify it for the loan? Or did they still look at your personal finances? MY LLC is recently formed and I have not transacted any business in it yet.

    They still looked at my personal finances. The LLC was maybe 6 months old, the property was originally purchased in my name then I transferred it into a single member LLC.

    1Reply
  • Marc Alberto
    Rental Property Investor · Danbury, CT · Member since 2016 · 25 posts · 24 votes
    6y
    Originally posted by @Nick G.:

    @Marc Alberto what bank was this?

    I used Savings Bank of Danbury.  

    0Reply
  • Henry Lazerow
    Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
    6y

    Lots of small local banks can do 20% down. You will typically get a better rate/terms 25% down conventional though.

    0Reply
  • Naomasa Hase
    Rental Property Investor · St. Louis, MO · Member since 2020 · 20 posts · 4 votes
    6y

    @Michael King Thanks! I'll mention your name when I'm ready to look for lenders!

    0Reply
  • Anthony H.
    Rental Property Investor · Denham Springs, LA · Member since 2018 · 95 posts · 44 votes
    6y
    As many have mentioned small local banks can give you a commercial loan under a LLC for 20% down 5 years fixed amortized over 20 years. I'm currently in the process of refinancing some of my properties this way. Even though my LLC is 2 years old they still pull your personal credit report as a new customer. Compared to conventional loans the interest rate is higher and the loan is not reported under the consumer credit reports. Which can improve (if you refinance) or doesn't affect you personal credit history.
    2Reply
  • Brandon Beatty
    Investor · Dallas, TX · Member since 2013 · 100 posts · 31 votes
    6y

    @David White If you have a track record, liquidity, and your buying a good deal, talk with a local bank. Most will be more aggressive if your willing to keep some liquidity with them.

    1Reply
  • David White
    OP
    Rental Property Investor · Atlanta, GA · Member since 2019 · 67 posts · 20 votes
    6y

    @Anthony H. Very good to know. Have you tried purchasing a property in your personal name before, then transferring it into an LLC?

    0Reply
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